Revenue growth is one of the most popular strategy case in a case interview

Usually, growth strategy cases are introduced by open-ended questions such as “A firm XYZ wants to increase their revenue. How should they go about it?”

Gather the necessary information about volume and price to determine the best growth lever

Revenue growth cases can be tackled by influencing two major parameters that determine growth figures. These are volume and unit price. In order to make suggestions, once again, you need to understand the client’s business and the industry. Growth strategies can focus on a product, a division, or on the company as a whole. Areas you could investigate based on your hypothesis:

Products

  • What is the client’s product mix? What's the lifecyle of each product?
  • What is the state of the respective industries? Are they growing?
  • Which product segments have the biggest potential?
  • What drives customer satisfaction?
  • How does the client’s sales growth rate compare to that of the competitors in the market?

Price

  • How are the client’s prices compared to that of competitors? For instance, if the product is a commodity, then prices should be similar
  • What is the customers’ price sensitivity? If the product is a commodity, then customers are likely to be very price sensitive

Marketing

  • What are the client’s marketing and sales channel activities? Evaluate their effectiveness
  • What are competitors’ marketing and sales channel activities? Evaluate the effectiveness if they are better than the clients’ sales

Financials

Choose a growth strategy and the growth vector you want to pursue

After having gathered this set of information, you will have got a feeling for the type of growth that is demanded. Based on this information, you can then decide which growth strategy to implement. Roughly, you can subdivide strategies into (1) organic growth and (2) inorganic growth. The categories can further be organized using an ansoff matrix.

Find new customers by (Ansoff Matrix):

  • Increase/switch distribution channels
  • Expand the product lines
  • Enter new markets
  • Perform a major marketing campaign
  • Increase your share of wallet with your existing customers e.g. by selling them add-on/bundled products
  • Lower customer churn rate by preventing unwanted customer attrition
  • Acquire other companies

If you have thoroughly completed this BootCamp, you will notice that many case types overlap with each other. You will rarely find a case that fits only one type. Most of the strategic decisions intersect. After completing the BootCamp, you should get a feeling for those connections and be able to see the big picture.

Check out Ocean´s pearl to practice a growth strategy case

4 Comment(s)
December 22, 2015 11:03 -
Frank

Same thoughts here. I would not feel very comfortable to start with a hypothesis on which growth strategy solution to follow. First i would like to identify opportunities and therefore i'd like to take a look at 3 things. (1) The customers, (2) The competition and (3) The company itself. After identifying the main opportunity to increase revenues i would like to look at the growth strategy in terms of growing through either (1) products, (2) price or (3) marketing.

December 01, 2015 16:11 -
Falco

I share the feeling of Thomas in that it definitely doesn't seem to be very MECE or structured.

The questions are all quite valid and indeed, Ritika, they are not completely random (as they are grouped under Products, Price, Marketing and Financials). However, if you ask them in this order I can't imagine the interviewer will view it as very structured, because there is a better way to structure. If you compare this categorization with for example Customers, Company and Competition, the latter would be more suitable - also more suitable to find root cause/opportunity.

Only when coming up with solutions, Products, Price, Marketing and Financials might be a good structure.

February 06, 2015 21:50 -
ritika

Hi Thomas, thank you for the comment. The topics in the framework are somewhat comprehensive and which topics you would want to evaluate will vary from case to case. For example:- if the case is about a "special product" and you want to increase this products sales. You would want to first understand (1) what is the product and why is it special? (2) Even if the product is really good, is it something the customers really want? or customer satisfaction, and then (3) What are the competitors doing ? is the client missing out something?. As you can see, this framework is very linear and targeted towards solving that company's problem/achieving goals. What you ask and in "which order" , which is very important, will differ from case to case. I hope this helps?. Let us know if you have any follow up questions.

February 03, 2015 17:32 -
Thomas

I don't think this framework is very structured.
If I think about following this framework, from the interviewer's perspective this would look like jumping around too much.
You are saying you are looking at the product and then you start talking about customer satisfaction and the growth rate of the competitors.

Related consulting question(s)

Two frameworks here: 4 Ps (= price, place, product, promotion), or the Ansoff Matrix (grow with existing or new products in existing or new markets). Both are quite MECE. Word of caution however --... (more)

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